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The September 1993 Israel-PLO Declaration of Principles on Interim Self-Government Arrangements provided for a transitional period of Palestinian self-rule in the West Bank and Gaza Strip. Under a series of agreements signed between May 1994 and September 1999, Israel transferred to the Palestinian Authority (PA) security and civilian responsibility for Palestinian-populated areas of the West Bank and Gaza.

Negotiations to determine the permanent status of the West Bank and Gaza stalled following the outbreak of an intifada in September 2000, as Israeli forces reoccupied most Palestinian-controlled areas. In April 2003, the Quartet (US, EU, UN, and Russia) presented a roadmap to a final settlement of the conflict by 2005 based on reciprocal steps by the two parties leading to two states, Israel and a democratic Palestine. The proposed date for a permanent status agreement was postponed indefinitely due to violence and accusations that both sides had not followed through on their commitments.

Following Palestinian leader Yasir Arafat's death in late 2004, Mahmud Abbas was elected PA president in January 2005. A month later, Israel and the PA agreed to the Sharm el-Sheikh Commitments in an effort to move the peace process forward. In September 2005, Israel unilaterally withdrew all its settlers and soldiers and dismantled its military facilities in the Gaza Strip and withdrew settlers and redeployed soldiers from four small northern West Bank settlements. Nonetheless, Israel controls maritime, airspace, and most access to the Gaza Strip. A November 2005 PA-Israeli agreement authorized the reopening of the Rafah border crossing between the Gaza Strip and Egypt under joint PA and Egyptian control.

In January 2006, the Islamic Resistance Movement, Hamas, won control of the Palestinian Legislative Council (PLC). The international community refused to accept the Hamas-led government because it did not recognize Israel, would not renounce violence, and refused to honor previous peace agreements between Israel and the PA. Hamas took control of the PA government in March 2006, but President Abbas had little success negotiating with Hamas to present a political platform acceptable to the international community so as to lift economic sanctions on Palestinians.

The PLC was unable to convene throughout most of 2006 as a result of Israel's detention of many Hamas PLC members and Israeli-imposed travel restrictions on other PLC members. Violent clashes took place between Fatah and HAMAS supporters in the Gaza Strip in 2006 and early 2007, resulting in numerous Palestinian deaths and injuries. Abbas and Hamas Political Bureau Chief Mishal in February 2007 signed the Mecca Agreement in Saudi Arabia that resulted in the formation of a Palestinian National Unity Government (NUG) headed by Hamas member Ismail Haniya . However, fighting continued in the Gaza Strip, and in June, Hamas militants succeeded in a violent takeover of all military and governmental institutions in the Gaza Strip. Abbas dismissed the NUG and through a series of Presidential decrees formed a PA government in the West Bank led by independent Salam Fayyad.

Hamas rejected the NUG's dismissal and has called for resuming talks with Fatah, but Abbas has ruled out negotiations until Hamas agrees to a return of PA control over the Gaza Strip and recognizes the Fayyad-led government. Fayyad and his PA government initiated a series of security and economic reforms to improve conditions in the West Bank.

Abbas participated in talks with Israel's Prime Minister Olmert and secured the release of some Palestinian prisoners and previously withheld customs revenue. During a November 2007 international meeting in Annapolis Maryland, Abbas and olmert agreed to resume peace negotiations with the goal of reaching a final peace settlement.

Late November 2007 through June 2008 witnessed a substantial increase in Israeli-Palestinian violence. An Egyptian-brokered truce in June 2008 between Israel and Hamas brought about a five-month pause in hostilities, but spiraling end-of-year violence culminated with massive Israeli air assaults on Hamas installations in late December followed by Israeli ground attacks in early January 2009. Israel in mid January unilaterally stopped the attacks and Hamas responded by suspending rocket and mortar fire. The fighting had resulted in the deaths of an estimated 1,100 to 1,400 Palestinians and left tens of thousands of people homeless. International donors pledged $4.5 billion in aid to rebuild the Gaza Strip, but by mid-May 2009 only a small fraction of the aid had been delivered.

Gaza continues to be the fulcrum of all problems in the mid-east; problems that radiate out to the entire world. Hamas and Fatah, now ruling separate parts of Gaza, are in a cold war that flashes hot on a regular basis. Attacks on political parties, clans, families and individuals occur without warning and often with no provocation.

Israel, which nominally supports Fatah is increasingly drawn into the situation and appears to lack a coherent long term strategy which only makes the situation worse.

Unemployment continues to be the second most stressful issues in the lives of Gazans, many of who endure the humiliation of passing through Israeli check points as the try to get to jobs in Israel. There is no question, Israel needs the checkpoints to deter suicide bombers and terrorists of all stripes but the consequences of this standoff are instrumental in keeping Gazans fighting among themselves and united in their antipathy to Israel. Unemployment is also a direct factor in sending hundreds and thousands of youths into the arms of Gazan radicals.

The Obama administration has criticized the settlement expansion in Israel leading to tension in the generally close U.S.-Israel relationship.

In Prime Minister Netanyahu's speech at the UN General Assembly in September '09 he tied peace in the Middle East closely to Iran. For the first time, he also stated that the Palestinians deserve a state of their own and confirmed - "all of Israel wants peace." In return he asked that the Palestinians say "yes to a Jewish state. Just as we are asked to recognize a nation-state for the Palestinian people, the Palestinians must be asked to recognize the nation state of the Jewish people. The Jewish people are not foreign conquerors in the Land of Israel. This is the land of our forefathers."

The peace process continues to be stalled. In a meeting on Sept 22, '09 with President Obama, Prime Minister Netanyahu and Palestinian Authority President Mahmoud Abbas it was clear that nothing had really moved forward. Israel maintains that even without a freeze on settlements, she has made major concessions to the Arab world without anything in return. The Obama Administration hopes that they can move past the discussion on settlement freezes to permanent status negotiations of theregion as a whole.